Econ 1000 chapter 1 questions.docx

Econ 1000 chapter 1 questions
Review quiz.
1. Some scarcity in Canada today include health care shortages, wealth, and
intellectual capital.
2. Some scarcity around the world includes peace, good character, and food.
3. Microeconomics such as when business fail and go bankrupt and
macroeconomics is when countries face wealth and food shortages.
4. What? Canada’s production of agriculture and manufacturing are quickly
decreasing and is being replaced by services. What determines the patterns of
production? How? There are factors of production which include land, labour,
capital and entrepreurship. These factors describe and influence directly the
production capabilities of a unit. For Whom? The more money an individual earns
the more they can purchase income is produced by selling the services of the
factors of production they own. Land earns rent, labour earns wages, capital
earns interest, and entrepreneurship earns profit. Labour earns the most income.
Distribution of wealth is unequal but who determines the distribution of wealth.
5. People are killed because of a robbery. The robbers are acting in their self
interest however is violating the safety and peace of society.
6. Eating and reading, opportunity cost for eating is the time lost gaining knowledge.
Playing and studying, the opportunity cost of playing is the time lost studying,
smoking and money, the opportunity cost of smoking is the loss of the things that
money could provide.
7. If we increase the work hours by an hour we can obtain 30 extra machines. If we
increase the study period by one hour we can gain 2 extra gpa points. If we
increase the cost of a car by 1thousand we will lose 3 customers.
8. Economists can predict the changes in choices by measuring people’s incentives
if there are more costs regarding and preventing some one with their act then it is
obvious that the action will decrease however the adverse will also be in effect.
9. Laws and regulations are set and wages are increased to give people incentives
or reduce their incentives for the well being of society.
10. Positive statements are statements that can be proven and normative are more
idealistic and theoretic. An example of positive is if we increase gas prices the
sales of cars will go down. An example of normative statement includes we
should increase the price of gas. 11. A model is a simulation to test and enforce a theory. Such as studying different
hour lengths and measuring the final marks to conclude a relationship between
the hours spend and the marks gained.
12. Three ways economists try to untangle cause and effects include natural
observations, statistic investigations, and experimental research.
13. Economics is used as a policy tool to help people and organizations make
decisions regarding to plans. it provides possible marginal incentives and
opportunity costs to companies to optimize their profit and fully utilize their
resources.
14. The use of marginal benefit and marginal cost the comparison between the two
terms to determine whether a decision is worth m